• by Erik Sass , July 31, 2008

Time Inc.'s struggling business titles got another shake-up Wednesday with two announcements: Fortune Small Business is losing most of its staff and moving to its custom-publishing division, and Money is getting a new publisher. The moves are symptomatic of the major downturn affecting business titles, and indeed, consumer mags in general.

Fortune Small Business--which is distributed free to about 1 million small business owners with American Express cards--will leave Time Inc.'s Fortune|Money Group and join Content Solutions, the company's Custom Publishing arm. As part of the transition, 14 of 17 staffers are losing their jobs, to be replaced by freelancers and the custom-publishing staff, who also produce Merrill Lynch Rewards. Managing Editor Dan Goodgame is out, with subordinate Brian Dumaine stepping into his role.

Time Inc. said that the magazine will not become a typical custom publication; editorial will continue to be independent of ad sales. If this is true, the move is simply a cost-cutting measure by a magazine publisher stretching to make ends meet in an adverse marketplace. Ad pages at Fortune Small Business are down 2.7% through August to 271.5, according to MIN Online, following a 13.8% drop in 2007 compared to 2006--to 477, per PIB.

None of the titles at American Express Publishing that draw on Time Inc.'s editorial expertise are affected. Amex and Time Inc. share the profits from these titles, including Travel + Leisure and Food & Wine.

Also on Wednesday, John Donnelly was named publisher of Money magazine, replacing Brett Wilson, who left the company to become senior vice president of ad sales at USA Today. Donnelly was previously the associate publisher for the Fortune|Money Group. Wilson left his post in June after just 10 months on the job--possibly because of pressure from higher-ups who expect publishers to staunch the losses at the struggling group.

At Money, a monthly, ad pages are down 1.75% through August to 465, following a decline of 16.7% in 2007 to 801 pages. At biweekly Fortune, ad pages are up slightly to 2.88 through August, following a 17.3% drop in 2007 to 2,376. Last year, Vivek Shah, the new head of the Fortune|Money Group, closed Business 2.0 after a year of declining ad pages.

It may not be much comfort to FSB staffers, but other business magazines are in the same boat. According to MIN Online, BusinessWeek's ad pages are down 16% through July 21st, Entrepreneur is down 2.35%, Forbes is down 18.5%, Kiplinger's Personal Finance is down 13.4%, and Smart Money is down 26.1%.

In all cases, these drops come on the heels of declines in 2007, except Smart Money, which was flat last year. On the bright side, so far in 2008, Fast Company is up 31.3%, Inc. is basically flat, and the Economist is up 5%.